Gateway CEO Inouye Resigns Unexpectedly

Gateway Inc. (GTW) Chief Executive Wayne Inouye has unexpectedly resigned, less than two years after he joined the struggling PC maker and orchestrated a reorganization, the company said on Thursday.

Gateway, which last year reported its first net profit since 2000, said Inouye, 53, left to pursue other interests but did not elaborate.

The company's shares fell 5 cents, or 2 percent, to $2.46.

"I am surprised," said FTN Midwest Securities analyst Bill Fearnley Jr, adding that Inouye was widely respected by investors and Wall Street analysts.

Gateway Chairman Rick Snyder, who will serve as interim CEO, said in a statement that the company would "...take this opportunity to reexamine the strategic direction of Gateway to fine-tune our products, services and approach to our professional and consumer-direct markets."

Snyder said neither he nor the board envision any immediate strategic changes in terms of products or sales channels.

Gateway had named Inouye as CEO after the company acquired eMachines. Inouye, who was previously CEO of closely held eMachines, replaced many of Gateway's key managers with executives from eMachines. He also closed an unprofitable chain of retail stores, laid off workers and slashed costs across the board.

"Investors want to hear what this means for the company," Fearnley said. "Does this mean that the company will just get a new management team? Or will it go in a new direction?"

Snyder, who was formerly president and chief operating officer of Gateway, in the statement said the company was "essentially" on the right course.

"Our employees and senior management team have a sense of urgency about improving the company's financial results," Snyder said.

Gateway said it hopes to name a new CEO by late summer.

As part of his separation agreement, Inouye has agreed not to compete with Gateway through the end of this year, according to a filing with the Securities & Exchange Commission.

Inouye could not immediately be reached for comment. Gateway said Inouye will receive a $720,000 cash payment and three years of health-insurance coverage as part of a separation agreement.